July 22, 2019

How to Pull Off Agile Mergers and Acquisitions

Mergers and acquisitions. They’re a chance for organizations to join hands in reaction to market forces, so that both organizations can survive and thrive. By combining resources, organizations infuse themselves with new brainpower and capacity, and have the opportunity to become a more agile, reactive organization that can take on those market forces with more confidence than ever before.

But M&A periods are notoriously rocky times for the teams at the affected organizations. Researchers have had trouble pinpointing the exact success rate of mergers and acquisitions, but no matter who you believe, the numbers aren’t good — somewhere between 40 to 60 percent of M&As fail and may actually cost businesses money.

But the rate of M&As is rising, and Deloitte forecasts that this is a trend that is only going to continue. So, to paraphrase Jerry Seinfeld, what’s the deal with mergers and acquisitions? How can we make them better for our people, and how can we stay agile throughout the M&A process?

Why an Agile Approach Is Good for Mergers and Acquisitions

So what do I mean by agile? Well, agile is a term that we in the C-suite are pulling from the world of programming. It’s an inversion and rejection of the hierarchical ways companies traditionally work, when organizational plans hold fast no matter what, and hierarchical roles are strictly enforced. Instead, agile organizations are built to react and reinvent themselves.

Instead of performing like a rigid machine, agile organizations act like an organic organism, responding to their environment and adapting when necessary. They break down barriers between departments, encouraging fluid communication and quick responses to marketplace changes.

It’s not hard to see how an agile modus operandi can set the stage for a successful, integrative merger or acquisition.

But creating an agile M&A is not as simple as getting a few lawyers in a room and negotiating. In fact, I’d say that’s the easy part.

What Most M&A Deals Overlook

Let’s do a quick flashback. I want you to think about the last time you read an article about a merger deal. There was probably a lot of talk about stock, revenue values and exciting new projects.

But there’s something we often don’t discuss — the people. Your stock value isn’t what’s going to steer you through a transformational, disruptive time in the market. Your brainpower will. Your people are the ones who will be coming up with new ideas. It’s their brains that will be doing the creative colliding with their new partners.

How do you combine two disparate teams — their processes, their skill sets, their collective knowledge — and keep them working productively under a new reality? Even if the two teams were working in an agile way before, how do you combine two agile organizations? After all, creating a more agile, nimble organization is the driving force behind most M&As, as companies combine forces to take on the new challenges the market has set in front of them.

Create a People Plan for Agile Mergers and Acquisitions

If most mergers and acquisitions are failing, perhaps it’s time to rethink how we do them by taking a people-first approach to M&As. People plans are the most important part of agile mergers and acquisitions.

Begin by visualizing a plan for your new team. Think about the weaknesses and strengths of each organization’s team, and the value each can bring to the other. And when that’s all done, ask yourself one more question: What does success mean for this new combined team or department? By setting clear goals, you’ll be better able to communicate your vision for the final step.

The moment the countdown begins, it’s time to prepare. No matter what department you’re in, here’s how to prepare your agile team for a merger or acquisition:

  • Set up meetings with your counterparts at the other organization.

Begin to learn about each other’s processes — what you do differently, what you do the same. This will help you determine which processes are in danger of duplication or disruption.

Figure out the challenges you will face, and start to ponder solutions. This will help you approach your collaborative work with a solution-focused attitude, cutting off frustration and surprises before they pop up.

  • Make a game plan for the new processes you’ll use to work together.

Talk about how you communicate, how you make decisions, how you manage projects, and what software and tools you use. The more day-to-day preferences you can figure out ahead of time, the easier it will be for your new organization to hit the ground running.

Leave space for new teams to form, disband, and reform. Agility means allowing for fluidity not only when you merge, but throughout the lifecycle of your organization. A rigid, formulaic approach will stifle the kind of relationship-building and creativity you want to encourage. Emphasize collaboration and empower team members to seek out the talent at their fingertips to get the job done.

  • List your top goals and priorities.

It’s not enough for you to have a plan. You have to find out your counterparts’ goals as well. Perhaps they differ from your own, but that’s okay. It’s an opportunity to create resilient teams that are greater than the sum of their parts — to figure out how you and your new partners can innovate together.

  • Help new coworkers find each other.

Your employees will be welcoming a new pool of coworkers. It’s important to intentionally introduce people to their new counterparts. Clearly spell out who will be working together, and don’t leave those new connections to chance. Finding a new coworker should be as easy as finding out whether the latest superhero movie you’re going to see has a post-credits sequence.

Give team members visibility into the whole enterprise. Communication tools are of course necessary, but they'll also need tools to discover who their new colleagues are, what skills they have, and how they can best work together to address new shared challenges.

By focusing on the people and getting intentional, organizations can successfully achieve agile mergers and acquisitions — and boost the concerning success rate of M&As worldwide.